Self-Storage Transformations Into Marijuana Grow Houses Won’t Be Growing Like a Weed

For five years, Dave Jones managed All Storage in Elma, WA, a rural town of about 3,000 residents halfway between the state capital of Olympia and the Pacific Ocean. Even after All Storage closed and went on the block, he continued to live in the upstairs apartment, hoping to reopen any day.

That all went up in smoke when the facility was sold in January. It’s set to reopen as Blue Star, a state-licensed marijuana growing and processing plant.

“We gutted the building, and soon we’ll do the same to my apartment upstairs,” Jones said recently. “The new owner is bringing in 600 grow lights—lots and lots of dollars. It seems like storage units would be a great place to rent grow space because you’d already have the spaces sectioned off. But now it’s just a big warehouse.”

Although some storage operators might be tempted to convert part or all of a facility into a highly lucrative recreational (“rec grow”) marijuana greenhouse for rent, the zoning, licensing, agricultural requirements and steep startup costs are heavily stacked against that pipe dream.

Here are four reasons why.

1. Location

In 2012, Colorado and Washington became the first states to legalize recreational marijuana. Last year, Alaska and Oregon joined them.

While the federal government still lists marijuana as a Schedule 1 dangerous drug under the Controlled Substance Act, the U.S. Department of Justice says it won’t enforce federal marijuana laws where weed is legal.

Colorado legalized recreational marijuana in 2012.

Ironically, as each state, and sometimes county and municipality, constructs its own rec-grow regulations, they’re doing so with guidance from the Cole Memorandum, a 2013 document drafted by the Justice Department to help prosecutors determine when to intervene in states where pot is legal.

The memorandum’s priorities aim to prevent:

Distribution of pot to minors.

Use or growth of marijuana on public land.

Harmful effects on public health.

Drugged driving.

Violence and gun use.

Use of state-licensed facilities as a cover for illegal trafficking.

Distribution of marijuana states where it’s not legal.

Run afoul of any of the above and you risk being accused of a federal crime.

That makes it difficult to imagine any but the most remote storage facility as a grow house, according to Cory Wray, executive director of the Alaska Cannabis Institute, a marijuana business consortium.

“We don’t expect to see a lot of people in Alaska turning self-storage over to grow, mostly due to zoning. Here, self-storage facilities are zoned pretty close to residential because they’re closer to grocery stores, schools, day cares and residential neighborhoods,” Wray said. “You’ll more likely see folks looking to convert warehouse and industrial sites to grow because they’re farther removed from population hubs.”

2. Licensing

As the first state to legalize recreational weed, Colorado has helped shape regulations in the three other states where it’s legal. That said, Colorado’s marijuana laws can change by crossing the street.

“Each locality and jurisdiction in Colorado has the ability to ban recreational marijuana or marijuana cultivation, period,” said Natriece Bryant, a spokeswoman for the Colorado Department of Revenue’s Marijuana Enforcement Division.

That means that while marijuana is legal in, say, Jefferson County west of Denver, it’s still banned in the Jefferson County communities of Golden, Lakewood and Wheat Ridge.

In Colorado, marijuana restrictions vary from city to city.

Municipalities also are free to restrict how many retail and grow facilities they’ll permit, and to charge their own licensing fees on top of the state fees, which can be substantial. A medical marijuana grow house with 300 patients faces a $12,200 annual outlay, while a retail grow house must pony up $10,800 a year, Bryant said.

And here’s another obstacle for self-storage transformations into grow houses: “If you were going to convert a storage unit, you would have to obtain licensing for every single unit,” Bryant said.

The regulatory hoops aren’t any easier to clear in Washington.

“The law in Washington is very specific. It’s not as though somebody could just convert to using the unit for marijuana,” said one self-storage expert who requested anonymity. “It’s like saying, ‘I wonder if my storage facility could be converted into a liquor store or a restaurant?’ There’s much, much more to it.”

3. Cultivation

There’s a lot more to successful cultivation of cannabis than meets the eye, according to Jaylene Peterson, retail sales manager at Grow Space Storage in Denver, CO.

“The picture is very different than what people think of as storage,” Peterson said. “The lifts and the water tanks that are built into the space, the different compartments that function for different facets of growing are really what it’s all about.”

Grow Space Storage in Denver, CO, rents out urban farming “pods.”

Each climate-controlled pod has its own irrigation system, adjustable ventilation, power supply, LED grow lights, and even wireless speakers “to play music proven to increase the grow rate of crops,” according to its website.

Could grow coexist with stow?

“I think it needs to be all or nothing,” Peterson said. “I don’t think you can really have public storage and just convert units that aren’t renting to [marijuana] grow space. It would be too litigious.”

4. Cost

Even those who dream about converting an entire storage facility for marijuana growing would be jolted by the cost.

“The expense is huge. These individuals spend hundreds of thousands of dollars just to start up their companies,” Bryant said. “It seems like a really cool idea to get involved in it, but if you don’t have that kind of money, you’re competing against people who do, and who have saved for a very long time. It’s not something you walk into cheap.”